How Does Law Affect Finance? An Empirical Examination of Tunneling in an Emerging Market

This paper documents that law affects finance in emerging markets through the methods used by controlling shareholders to “tunnel” wealth out of the firm. We find that Bulgarian securities law enabled financial tunneling via dilution and freeze-out tender offers. During the period 1999- 2001, about two-thirds of the 1,040 firms on the Bulgarian Stock Exchange were delisted. Freeze-out tender offers for minority shares averaged about 25% of the shares’ intrinsic value. Bulgarian securities law changes in 2002 made financial tunneling more costly for controlling shareholders. Subsequent increases in stock market valuations and liquidity suggest that controlling shareholders have shifted from financial tunneling to less value-destroying methods, such as transfer pricing, to extract wealth from firms.Tunneling, freeze-out, controlling shareholders, appraisal rights, preemptive rights

How Does Law Affect Finance? An Empirical Examination of Tunneling in an Emerging Market

This paper documents that law affects finance in emerging markets through the methods used by controlling shareholders to “tunnel” wealth out of the firm. We find that Bulgarian securities law enabled financial tunneling via dilution and freeze-out tender offers. During the period 1999- 2001, about two-thirds of the 1,040 firms on the Bulgarian Stock Exchange were delisted. Freeze-out tender offers for minority shares averaged about 25% of the shares’ intrinsic value. Bulgarian securities law changes in 2002 made financial tunneling more costly for controlling shareholders. Subsequent increases in stock market valuations and liquidity suggest that controlling shareholders have shifted from financial tunneling to less value-destroying methods, such as transfer pricing, to extract wealth from firms.http://deepblue.lib.umich.edu/bitstream/2027.42/40128/3/wp742.pd

The selling of put derivatives by firms for shareholder wealth and information signaling enhancement

Working paper; version dated November 5, 200

How does law affect finance? An examination of equity tunneling in Bulgaria

Draft version dated May 2010 deposited in SSRN. Final version, published in Journal of Financial EconomicsWe model and test the mechanisms through which securities law affects tunneling and tunneling affects firm valuation. In 2002, Bulgaria adopted securities law changes which limit two forms of equity tunneling - dilutive equity offerings and freezeouts. We document that following the change, minority shareholders participate equally in secondary equity offers, where before they suffered severe dilution; freezeout offer prices quadruple; and Tobin's q values rise sharply for firms at high risk of tunneling. At the same time, return on assets declines for high-equity-tunneling-risk firms, suggesting that controlling shareholders partly substitute for reduced equity tunneling by engaging in more cash-flow tunneling. We thus present evidence on (i) the importance of legal rules in limiting equity tunneling, (ii) the role of equity tunneling risk as an important factor in determining equity prices; and (iii) substitution by controlling shareholders between different forms of tunneling

Probing the N = 32 shell closure below the magic proton number Z = 20: Mass measurements of the exotic isotopes 52,53K

The recently confirmed neutron-shell closure at N = 32 has been investigated for the first time below the magic proton number Z = 20 with mass measurements of the exotic isotopes 52,53K, the latter being the shortest-lived nuclide investigated at the online mass spectrometer ISOLTRAP. The resulting two-neutron separation energies reveal a 3 MeV shell gap at N = 32, slightly lower than for 52Ca, highlighting the doubly-magic nature of this nuclide. Skyrme-Hartree-Fock-Boguliubov and ab initio Gorkov-Green function calculations are challenged by the new measurements but reproduce qualitatively the observed shell effect.Comment: 5 pages, 5 figure

Optically induced coherent intra-band dynamics in disordered semiconductors

On the basis of a tight-binding model for a strongly disordered semiconductor with correlated conduction- and valence band disorder a new coherent dynamical intra-band effect is analyzed. For systems that are excited by two, specially designed ultrashort light-pulse sequences delayed by tau relatively to each other echo-like phenomena are predicted to occur. In addition to the inter-band photon echo which shows up at exactly t=2*tau relative to the first pulse, the system responds with two spontaneous intra-band current pulses preceding and following the appearance of the photon echo. The temporal splitting depends on the electron-hole mass ratio. Calculating the population relaxation rate due to Coulomb scattering, it is concluded that the predicted new dynamical effect should be experimentally observable in an interacting and strongly disordered system, such as the Quantum-Coulomb-Glass.Comment: to be published in Physical Review B15 February 200

High-resolution measurement of the time-modulated orbital electron capture and of the β+\beta^+ decay of hydrogen-like 142^{142}Pm60+^{60+} ions

The periodic time modulations, found recently in the two-body orbital electron-capture (EC) decay of both, hydrogen-like $^{140}$Pr$^{58+}$ and $^{142}$Pm$^{60+}$ ions, with periods near to 7s and amplitudes of about 20%, were re-investigated for the case of $^{142}$Pm$^{60+}$ by using a 245 MHz resonator cavity with a much improved sensitivity and time resolution. We observed that the exponential EC decay is modulated with a period $T = 7.11(11)$s, in accordance with a modulation period $T = 7.12(11)$ s as obtained from simultaneous observations with a capacitive pick-up, employed also in the previous experiments. The modulation amplitudes amount to $a_R = 0.107(24)$ and $a_P = 0.134(27)$ for the 245 MHz resonator and the capacitive pick-up, respectively. These new results corroborate for both detectors {\it exactly} our previous findings of modulation periods near to 7s, though with {\it distinctly smaller} amplitudes. Also the three-body $\beta^+$ decays have been analyzed. For a supposed modulation period near to 7s we found an amplitude $a = 0.027(27)$, compatible with $a = 0$ and in agreement with the preliminary result $a = 0.030(30)$ of our previous experiment. These observations could point at weak interaction as origin of the observed 7s-modulation of the EC decay. Furthermore, the data suggest that interference terms occur in the two-body EC decay, although the neutrinos are not directly observed.Comment: In memoriam of Prof. Paul Kienle, 9 pages, 1 table, 5 figures Phys. Lett. B (2013) onlin

On the possibility of magneto-structural correlations: detailed studies of di-nickel carboxylate complexes

A series of water-bridged dinickel complexes of the general formula [Ni<sub>2</sub>(μ<sub>2</sub>-OH<sub>2</sub>)(μ2- O<sub>2</sub>C<sup>t</sup>Bu)<sub>2</sub>(O<sub>2</sub>C<sup>t</sup>Bu)2(L)(L0)] (L = HO<sub>2</sub>C<sup>t</sup>Bu, L0 = HO<sub>2</sub>C<sup>t</sup>Bu (1), pyridine (2), 3-methylpyridine (4); L = L0 = pyridine (3), 3-methylpyridine (5)) has been synthesized and structurally characterized by X-ray crystallography. The magnetic properties have been probed by magnetometry and EPR spectroscopy, and detailed measurements show that the axial zero-field splitting, D, of the nickel(ii) ions is on the same order as the isotropic exchange interaction, J, between the nickel sites. The isotropic exchange interaction can be related to the angle between the nickel centers and the bridging water molecule, while the magnitude of D can be related to the coordination sphere at the nickel sites